The Court ran checks on CFR SA’s central office, as well as six regional branches – Brasov, Bucharest, Cluj, Galati, Iasi and Timisoara – discovering that accounting misconduct responsible for RON151.58 million and errors that caused RON60.25 million in losses.
CFR’s central office did not compute or collect penalties for non-execution of the contracts for feasibility studies necessary to implement Schengen Area accession requirements, did not charge the guarantees provided by railway operators that had not paid the infrastructure use fee, and retained stocks of materials and equipment older than 1-7 years for investments that have not been begun.
The regional branches were responsible for misdeeds ranging from claiming bogus expenses and revenue, or paying for fictitious work, to failing to register property inflows and outflows.
The Court of Accounts evaluated CFR’s internal management and control systems, revealing that CFR SA’s central office did not carry out an evaluation of employees responsible for preventive financial control, its management did not develop or implement a code of conduct, and the methodology on internal control does not provide monitoring, coordination or guidance responsibilities. The other six branches’ internal control systems were also deemed unsatisfactory.
The Court’s report concludes that CFR SA does not manage the state’s property according to the principles of economy, efficiency and effectiveness, its financial statements do not paint an accurate picture of its financial performance, and its administration of the state’s property is incompatible with its purpose.
The Court suggests CFR should analyze the clauses of contracts running in 2009-2010, rectify its books, develop and implement the code of conduct on internal control, and analyze its pending court cases.
At Electrificare CFR, the misconduct caused losses of RON114.02 million. Among others, the company was responsible for exceeding its budgeted expenses or inefficiently using funds. (EUR1=RON4.3532)